Thousands of mourners are calling for the downfall of Bahrain's ruling monarchy as they begin burying those killed during an assault on pro-reform protesters that has brought army tanks into the streets of the west's most strategic Gulf ally.

The reaction against Bahrain's king and his inner circle reflects an escalation of protesters' initial demands for the Sunni monarchy's hold on top government posts to be diluted, and for discrimination by the Shia majority to be addressed.

The mood, however, appears to have turned towards defiance of the entire ruling system after the attack on a protest camp in Bahrain's capital, Manama, on Thursday left at least five dead and more than 230 injured. The country was placed on an emergency-like footing, with military forces in key areas and checkpoints on main roads.

"The regime has broken something inside of me ... All of these people gathered today have had something broken in them," said Ahmed Makki Abu Taki, whose 27-year-old brother Mahmoud was killed in the pre-dawn sweep through the protest camp in Pearl Square. "We used to demand for the prime minister to step down, but now our demand is for the ruling family to get out."

Outside a village mosque, several thousands mourners gathered to bury three men killed in the crackdown. The first body, covered in black velvet, was passed hand to hand towards a grave as it was being dug.

Amid the Shia funeral rites, many chanted for the removal of King Hamad bin Isa al-Khalifa and the entire Sunni dynasty that has ruled for more than two centuries in Bahrain, the first nation in the Gulf to feel the pressure for changes sweeping North Africa and the Middle East.

There were no security forces near the mosque on the island of Sitra, where three of those killed had lived.

The White House has expressed "strong displeasure" about the rising tensions in Bahrain, which is home to the US Navy's 5th Fleet and the centrepiece of the Pentagon's efforts to confront growing Iranian military ambitions in the region.

The capital and other areas remain under the close watch of the military and police – which includes various nationalities from around the region under a policy to give citizenship and jobs to other Sunnis to try to offset the Shias, who account for about 70% of the population.

Soldiers placed roadblocks and barbed wire around Pearl Square and other potential gathering sites. Work crews were busy trying to cover up the protest graffiti.

Bahrain's leaders have banned public gatherings in an attempt to keep the protest movement from re-igniting. But the underlying tensions in Bahrain run deeper than the rebellions for democracy that began two months ago in Tunisia, ousted Hosni Mubarak in Egypt and is challenging old-guard regimes in Libya and Yemen.

In the government's first public comment, the foreign minister, Khalid al-Khalifa, said on Thursday the crackdown was necessary because the demonstrators were "polarising the country" and pushing it to the "brink of the sectarian abyss".

Speaking to reporters after an emergency meeting with his Gulf counterparts in Manama to discuss the unrest, he called the violence regrettable, and said the deaths would be investigated. He said the authorities chose to clear the square by force at 3am – when the fewest number of people would be in the square – "to minimise any possibility of casualties".

Many of the protesters were sleeping and said they received little warning of the assault. More than 230 people were injured, some seriously.